Forex Margin Trading Case Studies

Forex margin trading is one of the most glamorous reason behind forex trading for me. I can
trade only with 1% margin requirement or even lower. This also implies I can equally magnify
profit and losses.

Forex trading on margin should be carried out with extra caution in order to prevent margin calls
in the case of losing trade.

One of the very basic concept of money management is to know all the time: equity, used margin,
usable margin and usable margin percentage.

So continuing with this trend, with usable margin of $9704.6 and at $2 per PIP,
the market would have to move 4852.3 PIPs before I will get a margin call (= 9704.6/2 = 4,852.3 PIPs),
i.e. the market has to come to 1.42007 from 1.46860.

The bottom line is forex margin trading could be glamorous in one sense but I have learned from my
past follies that maintaining Usable Margin Percentage 90% and Above At All the Time is absolutely
must to withstand any draw-downs while forex trading on margin.

What are your forex margin trading practices?

Have your say about what you just read! Leave me a comment in the box below.